Conviction Equities Boutique

The China paradox: underrepresented or too dominant in emerging market equities?
After a multi-decade era of significant economic growth, China is now the second largest global economy and dominant in the MSCI emerging market index. How should emerging market equities investors balance this with the potential implications of recent economic and political moves out of Beijing and shifting demographic patterns?
Conviction Equities Boutique

How to invest when the world is on the brink?
We reap what we sow: the “double dividend” concept seeks to offer financial returns and a better tomorrow
Conviction Equities Boutique

Reap what you sow: seek to harvest your "double dividend"
Generating financial returns and making a positive impact on our planet and society are equally important in impact investing – but so is measurement. To effectively measure impact, we use a systematic and repeatable approach with a commitment to full transparency at all times.
Conviction Equities Boutique

Can EM equities play catch-up in the second half of the year? Spoiler alert: we believe so!
Investors can look back at having had to navigate a difficult first half of the year. Emerging-market equities, though posting positive returns, trailed their developed-market counterparts. Could things turn around in the remainder of the year, leading to an outperformance of EM stocks?
Asset management

Fighting the good fight: The role of carbon markets
To say addressing carbon emissions is urgent errs on the side of understatement. Tackling the transition toward decarbonization requires a collective effort, and carbon markets have a key role to play in the climate change fight – though those opportunities also come with some challenges.
Quality Growth Boutique

The fallout of the US banking crisis and how quality can provide resilience
With regional banks in the US concerned about deposit flight, financial conditions are tightening, increasing the probability of a hard landing for the economy. Quality companies that do not rely on leverage and whose earnings tend to be more resilient during times of economic weakness can be an attractive option for investors.
Quality Growth Boutique

International Equities: A compelling growth story unfolds
Multinationals listed in the US can provide exposure to global revenues. But an international approach also offers access to world leading companies that have no equivalent in domestic markets. And with valuations at a wide discount to the US, and below long-run averages, the story in international equities is both timely and compelling.
Quality Growth Boutique

Measured growth wins races: compounding capital in tougher conditions
Low interest rates, declining tax rates, and constrained wages contributed to margin expansion for large US companies over the past decade. Companies whose growth is driven by these temporary factors may be more vulnerable in tough conditions, while quality companies with structural growth drivers designed to succeed in all conditions may prevail.
Asset management

Knowing your supply chain is crucial for investing in a new era
For a single company, supply chain oversight can be complex. For professional investors with multiple companies in their investment portfolios, this task can become massive. Complexity, however, is not something to hide behind.
Quality Growth Boutique

ESG at Vontobel Quality Growth: A common sense approach
ESG research is an extension of our philosophy of long-term thinking and fits seamlessly into our existing research process. We focus on material issues rather than broad ESG scores, which enables us to understand and get ahead of risks that can jeopardize earnings predictability.
Conviction Equities Boutique

Emerging market equities: What follows the lost decade?
When comparing the earnings trajectory of emerging markets corporates with that of their developed-market counterparts, many investors consider this a lost decade. Are emerging market stocks now set to bounce back?
Asset management

Three reasons to invest in emerging market equities
After a decade of underperformance, we believe emerging market equities are set for a brighter next chapter and any further short-term pain will be outweighed by the opportunity for longer-term gain. Here are three reasons why:
Quality Growth Boutique

The end of irrationality: 2023 Global Equity Outlook
Structural themes underlie opportunities in the year ahead. Our Quality Growth portfolio managers expect stock performance will be more closely tied to earnings growth, the US consumer will remain healthy, select emerging markets are poised for continued growth, and certain Chinese stocks will benefit from a reopening.
Conviction Equities Boutique

3 cycles to boost Emerging Market equities going into 2023
Following a difficult and volatile 2022, there are sound reasons to believe that EM equities could deliver a strong rebound in 2023. Along with compelling relative valuations of EM equities, we identified three key cycles that have the potential to provide a positive boost to EM equities next year.
Conviction Equities Boutique

Meeting sustainability and investor goals by supporting biodiversity
Biodiversity loss often takes a backseat to climate change in global headlines but ignoring the preservation of natural ecosystems poses a threat to water, land, marine life, health, and can increase poverty. There is an urgent need for change. The upcoming COP 15 will address biodiversity solutions that will benefit companies, investors, and society.
Quality Growth Boutique

Preparing your portfolio for a recession
As the cycle of market excesses comes to an end, how can investors prepare? Tilt towards a portfolio of less-cyclical companies with pricing power and don’t mistake quality companies for those with an exciting story. The good news is that human ingenuity is not limited by the macro environment.
Conviction Equities Boutique

Embracing net zero targets the right way
With Egypt’s Sharm el-Sheikh being the venue of this year’s United Nations Climate Change Conference (COP), it’s worth remembering that developing economies bear most of the negative effects of emissions mainly produced in industrialized nations. Therefore, the onus is on western companies to go “net zero carbon”, but how to measure their progress? One common yardstick for investors is the carbon footprint method – or the more encompassing “potential avoided emissions” method propagated by Vontobel’s impact investing team.
Conviction Equities Boutique

Global Environmental Change strategy impact report 2022: Renewables with prospects in a gas-deprived world
The renewables industry looks set to benefit from tightening regulation in the European Union, or a recently signed US law aiming to decarbonize the US power sector. The nascent “clean energy” industry, which encompasses areas such as electric vehicles, batteries, or hydrogen produced in a sustainable manner, opens new opportunities for investors as well.
Conviction Equities Boutique

Global food crisis: How can investors help to ease it?
Feeding a starving person is important, we all agree on that. But from an investor’s point of view, allocating capital to companies working towards the same end is perhaps even more appropriate. But first, go find promising ones active in areas such as increasing land yields, reducing food waste, or preserving biodiversity, to name a few.
Quality Growth Boutique

When the music stops: preparing your portfolio for the end of easy money
As the cycle of market excesses comes to an end, how can investors prepare? Tilt towards a portfolio of less-cyclical companies with pricing power; don’t mistake quality companies for those with an exciting story; and watch out for underestimated risks, such as carbon emission liabilities.
Conviction Equities Boutique

China: Market overreaction despite no negative surprises from National Party Congress
Price action on Monday has taken the implied equity risk premium to 10.7%, the highest since 2008. Foreign investors appear to have interpreted the composition of newly appointed Standing Committee in China as offering less likelihood of a change in policy direction on the government’s dynamic zero-Covid stance. However, the announced policies were in-line with expectations and there were no negative surprises.
Asset management

Must ESG be bad news for emerging markets?
As part of Vontobel’s FT Moral Money Forum partnership, Christel Rendu de Lint, our deputy head of investments, weighs in on the complexities that accompany ESG in emerging markets.
Quality Growth Boutique

How to Net Zero – seeking to achieve our goal and the goal
Asset owners are increasingly demanding net zero plans from their investment managers, who need to determine how to track and reduce portfolio emissions. Issues include: rebalancing vs rate of reduction, whether it’s too early for Scope 3, and ensuring engagements go beyond the more receptive European and US markets.
Quality Growth Boutique

Will emerging markets shine again?
EM GDP growth remains higher than the rest of the world, EM central banks have been more proactive than developed markets in managing inflationary pressures, and the US dollar’s precipitous rise this year has had a greater impact on developed country currencies vs. emerging markets.